Corporate & Securities Law

Cert Granted in Linkline

The Supreme Court has granted cert in Pacific Bell Telephone Co., dba AT&T California v. linkLine Communications in order to address the question of whether a Section 2 “price squeeze” claim is viable under the Sherman Act if the defendant has no duty to deal.  (HT: Scotusblog, which also has all of the relevant links).   The “price squeeze” claim alleges that the defendant? typically a vertically integrated retail competitor with a monopoly at the wholesale level? leaves too small a margin between wholesale and retail prices to allow the plaintiff to compete.

Of course, one of the most interesting aspects of the case is that the Solicitor General’s amicus brief favored granting cert whereas the Federal Trade Commission Statement recommends denial.   If the recent trends of the Robert Court’s antitrust jurisprudence hold, the combination of consensus view that “price squeeze” claims don’t make economic sense or improve consumer welfare and the Solicitor General’s recommendation means that the smart money is that the Court will abolish the price squeeze theory of liability.   I predict at least 7 votes in the majority.

Full post as published by Truth on the Market on June 23, 2008 (boomark / email).